USDA Loan Frequently Asked Questions

Jan 20, 2020 02:42 PM

By: Primary Residential Mortgage, Inc.

Primary Residential Mortgage, Inc. offers hundreds of affordable loan options, including USDA loans. These loans are a great tool for low- to moderate-income borrowers looking for homes in rural areas. Check out these frequently asked questions to learn more about how they work.

What does USDA stand for?

USDA stands for the Unites States Department of Agriculture. This is the government organization that insures the loan.

What is a USDA loan?

USDA loans were designed to make rural homeownership more affordable. These fixed-rate loans are government insured and often available with 100% financing.*

*Closing costs and fees may still apply.

Who is eligible for a USDA loan?

To qualify for a USDA loan, the property must be in an eligible area. There are geographic restrictions, but in general it needs to be in a rural area. The property must be owner occupied, and only one-unit homes are eligible.

Your Loan Officer can help you figure out if you’re eligible for this loan. It’s a great option for first-time homebuyers, but you don’t have to be a first-time homebuyer to qualify.

What down payment is required with a USDA loan?

You can get a USDA loan with no down payment.* This is one of the main benefits of a USDA loan since it makes it easier to buy a home sooner.

*Closing costs and fees may still apply.

Do you need great credit to qualify for an USDA loan?

You can qualify for a USDA loan with a credit score as low as 620.

Will I have to pay mortgage insurance?

You will likely have to pay mortgage insurance with a USDA loan. In most cases, your mortgage insurance payment will depend on how much your down payment is.

What can I use a USDA loan for?

USDA loans can be used to buy a new home, but in some cases can also be used for a cash-out refinance. There is also a version of USDA loans for manufactured homes.

A USDA loan is one of the many affordable home financing options available. As always, we’re here to help you find the option that works for your unique needs, whether it’s a USDA loan or another program.

If you’re interested in a USDA loan, contact your local PRMI Loan Officer for more information.